TikTok, in a remarkable feat, became the first non-gaming app to reach $10 billion in consumer spending. The only other apps to exceed this spending cap are all games, including Candy Crush, Honor of Kings, Monster Strike, and Clash of Clans.
The social media giant also announced a $1.5 billion investment in Indonesia’s Tokopedia, signaling expansion in Southeast Asia’s market.
TikTok’s $10 billion triumph
TikTok kicked off 2023 on a high note with more than $6.2 billion in consumer spending. Data.ai reports that an additional $3.8 billion was generated throughout the year. Compared to 2022, this is an increase of 15%.
Most of the revenue came from the platform’s virtual currency, known as Coins. Users can buy Coins from within the app to support creators on the platform. TikTok also takes a hefty 50% of these in-app purchases.
The data shows that the bundle of 1,300 coins for $20 was the most popular among the platform’s large user-base. Tiktok reached a milestone of 1 billion users back in 2021.
At this rate, TikTok is set up for a bright 2024. Data.ai predicts, it “will reach $15 billion in consumer spend, or 50% more than its current cumulative sum. Of course, this is on top of TikTok’s other revenue streams.”
Market support
TikTok also generates revenue from advertising and the TikTok Shop. The recent move to launch the e-commerce feature was likely an attempt to rival the success achieved by Asian counterparts, such as Shein and PDD Holdings’ Temu.
It was a smart strategic move on TikTok’s part, since research conducted by Kantar shows how 92% of users buy a product after watching a TikTok video.
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The user bases in the United States and China go head-to-head in terms of contributing to TikTok’s life-to-date revenue. The report states: “Both have generated approximately 30% of it alone, and together comprise 60% of the total, or about $6 billion.”
The biggest markets following that are Saudi Arabia, Germany, the United Kingdom, and Japan. These four countries combined contribute approximately 13% of the app’s revenue.
$1.5 billion Indonesian venture
In other news, TikTok is investing $1.5 billion in Tokopedia, the e-commerce arm of Indonesia’s GoTo. The funds will be made available “over time,” GoTo confirmed in a recent statement. “The arrangement will allow both TikTok and GoTo to each serve Indonesian consumers and MSMEs (Micro, Small & Medium Enterprises) more comprehensively.”
GoTo says it will benefit from TikTok’s growth while remaining an ecosystem partner to Tokopedia. GoTo will “also receive an ongoing revenue stream from Tokopedia commensurate with its scale and growth.”
The venture will create “millions of new job opportunities” during the next five years. It will also support merchants to sell their products online, promote local brands to international sellers, and aid in establishing new technology centers in Indonesia.
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
